Our previous studies indicated that transforming growth factor (TGF)-?1 plays a key role in skeletal muscle fibrosis after injury. Antifibrotic agents that inactivate TGF-?1 can reduce muscle fibrosis and significantly improve muscle regeneration and repair. Furthermore, we have also demonstrated that the transplantation of muscle- derived stem cell (MDSCs) could improve muscle regeneration after injury, but the differentiation of the injected cells into fibrotic cells limits the beneficial effect on muscle repair. In fact, we have observed that MDSCs under the influence of TGF-?1 from the injured muscle microenvironment, not only induce an autocrine expression of TGF-?1 but also promote the MDSCs? differentiation into myofibroblasts that contribute to the development of fibrosis. We have recently reported that combining losartan (anti-fibrotic agent) with MDSC transplantation significantly improved the regenerative potential of MDSCs in skeletal muscle by preventing the MDSC?s differentiation into fibrosis. Although the systemic use of losartan is safe and FDA-approved, it likely leads to widespread blockade of TGF-?1 which might not be desirable. In addition, pharmacological anti-fibrotic therapies are often effective at diminishing fibrosis, but are used at high, unregulated doses and have significant side effects. More recently, using the CRISPR/Cas9 genome editing system, our co-Principal Investigator (Dr. Guilak) created stem cells that can antagonize IL-1? or TNF-?-mediated inflammation in an auto-regulated, feedback- controlled manner for musculoskeletal regenerative medicine applications. They have demonstrated proof-of- concept of the ability to custom-design stem cells that are immune to pro-inflammatory cytokines as a potential cell source for optimal tissue repair. We therefore propose that this novel genome engineering system can also be used to antagonize TGF-?1-mediated fibrosis and further improve muscle healing after injury. We propose to target the TGF-? soluble receptor type II (TSRTII), to antagonize TGF-?1-mediated fibrosis in the application. We are proposing to develop an autoregulatory gene circuit in MDSCs, such that the TGF-?1 gene will be reprogrammed by nuclease-mediated integration of the TSRTII, a TGF-?1 antagonist, immediately downstream of the TGF-?1 signaling pathway. Transgene expression from the endogenous TGF-?1 locus in engineered MDSCs will provide rapid feedback-control to produce TSRTII in response to TGF-?1. We will first test whether the gene-edited MDSCs show the ability to mitigate the fibrotic effects of TGF-?1 in vitro, by examining the differentiation of MDSCs into myofibroblasts and the expression of TSRTII and genes involved in the TGF-?1 pathway. Next, we propose to determine whether muscle regeneration & repair with control MDSCs show significant fibrotic events in response to TGF-?1, whereas muscle repair with genome-edited MDSCs will be protected from fibrosis after injury in vivo.